NEW YORK -- Dr Pepper Snapple Group will roll out 7.5-ounce cans of its major carbonated-soft-drink brands nationally this year, replacing the 8-ounce cans it previously launched as a caloric alternative to 12-ounce cans.
The news comes from a Wall Street Journal report on one of the worst-kept secrets in beverages: that major soda makers are keeping their numbers in the black by charging more per sip.
“Big soda has found a way to stem its losses: charge more for less,” the newspaper reported this week in an article primarily outlining Coca-Cola’s package-size variety.
“Industry leader Coke has been the most aggressive in pushing smaller sizes to consumers,” the newspaper said. “The company says sales of its smaller packages—including eight-packs of 12-ounce bottles and 7.5-ounce cans—rose 15% in the first nine months” of 2015.
PepsiCo and Dr Pepper’s smaller-package efforts are outlined, too, essentially underscoring the opportunity to charge more per ounce in smaller packages.
The measure—average equivalent price growth—has become a significant tool for analysts who see the new package sizes as a key way to keep dollar sales growing even as volume sales decline. U.S. sales of soda have declined over the past 11 consecutive years, according to the report.
But soda makers pitch the new packages as addressing the way consumers behave today.
“Moms want to treat their kids, but they don’t want them to have too much,” Sandy Douglas, North American president of Coca-Cola Co., told investors at a November conference, according to the report.
American soda drinkers “want to consume less but they still enjoy their favorite brands,” Marty Ellen, Dr Pepper Snapple Group’s chief financial officer, told the newspaper, representing the current thinking that charging consumers more for less is sustainable “for the foreseeable future,” he said, because even at higher prices, soda is still a “cheap treat.”
Click here to read the complete Wall Street Journal story.
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